The new era has begun and we're all beginning to see what we can expect during The Age of Obama. Entering on the Presidential scene last year, Obama called on a new generation to join in a campaign based on hope, driving change in Washington, and ending the war in Iraq. His opponent proved to be a relatively weak candidate and when the financial crisis hit it was the final blow on the Republicans. Obama was destined to win, and now we are seeing how the politics and issues of the day are likely to play out.
It has been the perfect storm. The free market system and the foundation of capitalism cracked under pressure in an unprecedented gaming of the system that will take years to correct. Regardless of who is at fault, we know who benefited; the financial services companies and executives who took unregulated risks playing with our future. Let's be frank, the failure of the free market system occurred on the watch of a Republican President in the face of that party's beliefs in limited oversight, fewer regulations and free markets. While many of the beneficiaries of the game supported the party, and believe me it was a party, the excesses of the free market system provide the fuel for The Age of Obama.
How many of us who voted for Obama thought he would pass a $800 billion spending bill during his first thirty days in office and submit a budget projecting a $1.75 trillion budget deficit? If many of us would have predicted such enormous spending proposals, we probably wouldn't have voted for him; and that's the point. Republicans understand this and now they have found their true voice. Let's not talk about being complicit in supporting the decisions and problems which got us into this financial crisis, let's focus on the tax and spend liberals who have always dominated and led the Democratic party. From the Republican perspective, Obama's decisions are just setting the trap, but for the Democrats now is the time to press their hand and realign government. As almost the anti-Reagan, Obama is redirecting and increasing spending with the hope that taxes and revenue will follow. Reagan cut taxes and hoped that changes in spending would follow, but we all know how that turned out.
During The Age of Obama, we can expect the clash of two central ideas and philosophies. This is the fight based on the rebirth of the Young Republicans versus the New Age Democrats. Obama has seized the moment, and using a basketball analogy, is using a full court press to take advantage of the speed and momentum of the moment. The Republicans are outmanned and showing they don’t have the bench or the skill to break the press, but this will likely change. Obama knows this is the case and that is why we will likely see him pull out all of the stops early in his first term. The remainder of his first term and possibly his second will be a waiting game. Watching the political fight but with no need to engage as the economy's rebound will be the scoreboard and tax policy will follow the requirements of what needs to be done to reduce the deficit. Big government, higher taxes, inflation and higher interest rates are sure to come.
How will these trends affect your business? Do you believe the stimulus and spending coming out of Washington is necessary and the right thing to do?
